IRS to Enhance Taxpayer Dispute Resolution Programs
The IRS appeals office has announced new initiatives aimed at improving dispute resolution programs and increasing awareness of these programs following a recent government report criticizing their management.
The Internal Revenue Service’s Independent Office of Appeals released its “Focus Guide” for fiscal year 2024, emphasizing its commitment to helping taxpayers resolve tax disputes in a fair and impartial manner without going to court, according to a press release by the agency on Dec. 8.
One focus area highlighted in the guide is the alternative dispute resolution (ADR) programs, which use an IRS mediator to resolve tax disputes between taxpayers and the agency.
In the past 20 years, the IRS has offered taxpayers four principal post-filing ADR options. The appeals office now plans to introduce new ADR programs in a pilot test phase and increase awareness about such programs among taxpayers.
The agency stated that ADR programs can be essential in efficiently resolving tax disputes without litigation and in a fair and impartial manner to both taxpayers and the government.
The appeals office’s announcement comes after a report by the U.S. Government Accountability Office (GAO) criticized the IRS for poorly managing these programs, stating that the use of ADR programs fell by 65 percent between fiscal years 2013 and 2022.
The report also mentioned that the IRS lacked data to understand why ADR use had decreased, did not collect data on rejected taxpayer requests for ADR, and did not assess taxpayers’ experiences with ADR. The GAO made eight recommendations to improve these programs, including collecting and analyzing data to enhance performance.
The four principal post-filing ADR programs offered by the Appeals office are:
1. Fast Track Settlement (FTS)
2. Fast Track Mediation – Collection (FTMC)
3. Rapid Appeals Process (RAP)
4. Post Appeals Mediation (PAM)
The IRS invited public input on ways to improve dispute resolution programs and is eyeing to restructure the alternative dispute resolution process to help reduce the time, costs, and administrative burden for taxpayers and the government in resolving tax disputes.
The IRS aims to transform the agency to resolve taxpayers’ disputes at the earliest stage possible, and it plans to promote digital platforms for communication, paperless processes, and tax certainty for taxpayers. The agency is also working to ensure easy digital communication with taxpayers and modernizing its processes for improved efficiency.
The appeals office’s involvement in the IRS’s transformation and modernization efforts is crucial to effectively and efficiently serving taxpayers, as stated by Deputy Chief of Appeals Liz Askey.
